National trucking index dips in May; up year-to-date
The national economic recovery may come with ups and downs based on the dip in the May Truck Tonnage Index from the American Trucking Associations.
According to the ATA, trucking serves as a barometer of the U.S. economy, representing nearly 68% of tonnage carried in 2008 by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 8.8 billion tons of freight in 2009. Motor carriers collected $544.4 billion, or 81.9% of total revenue earned by all transport modes.
ATA reported a 0.6% dip in the seasonally adjusted index, ending five consecutive months of index gains and following an upward revision of 1% in April. The May report puts the index at 109.6 (2000 = 100).
Compared with May 2009, SA tonnage increased 7.2%, which was the sixth consecutive year-over-year gain. In April, the year-over-year increase was 9.5%. Year-to-date, tonnage is up 6.2% compared with the same period in 2009.
“Despite the month-to-month drop in May, the trend line is still solid. There is no way that freight can increase every month, and we should expect periodic decreases. This doesn’t take away from the fact that freight volumes are quite good, especially considering the reduction in truck supply over the last couple of years,” ATA Chief Economist Bob Costello said in a statement.
Todd Fowler, vice president and equity research analyst with KeyBanc Capital Markets, noted in a June 9 The Wall Street Transcript report that economic recovery and restocking of retail and manufacturing inventories have boosted freight levels.
“Certainly the economy improving, or not getting worse, is helping. The other piece is that inventories in the supply chains were drawn down incredibly quickly and precipitously to a very lean level last year. This was certainly pronounced in the retail supply chain, but also in the manufacturing supply chain,” Fowler said. “Entering this year, we had very lean inventories, and sales activity started to recover and improve. Manufacturers and retailers realized they needed to build more inventory, and ultimately what we believe is happening is they are playing a little bit of catch-up as sales activity continues to strengthen.”
The trucking sector is important to the Arkansas economy. Arkansas and Nebraska are tops in the country in in terms of percentage of total state employment being in the trucking sector, according to the ATA trends. In Arkansas, 3.7% of all people employed in the private sector worked for a trucking company, with 3.6% for Nebraska. California and Texas have the most people working in the trucking industry in terms of total numbers.